Dheeraj Gupta clearly admires the McDonald’s business model which is all about focusing on a single idea and then growing it across the globe.
It was this simple, yet profound, logic that inspired him to start Jumboking in 2001 from a 100 sq ft store in a Mumbai suburb. And it was the city’s own desi burger, the vada pav , which was the core of this takeaway.
“The idea was to exploit its potential,” Founder and Managing Director of Jumboking told me over lunch in a restaurant overlooking Mumbai’s bustling Marine Drive.
An MBA graduate from Pune, Gupta opted to take the entrepreneurship route while his classmates were revelling in the luxury of working in “fancy companies”. As he literally slaved through the day in the store selling
Jumboking’s sales were slow for the first five months because customers did not really understand what was being dished out in the eating experience.
“I spent a lot of time watching people and realised that what they essentially wanted was a piping hot product. It was our job to ensure that this was done. The customer migrating to Jumboking has had his share of vada pavs from the streets of Mumbai and clearly wants something better here,” Gupta said.
Packaging was another important part of the Jumboking experience and wrapping up the stuff elegantly made a big difference to the buying experience. “Gradually, customers began figuring out that here was a dish which was tasty and packaged well,” Gupta says.
First store
The first store was set up with an investment of Rs 2 lakh and its profits went into the second which was up in the same neighbourhood after 18 months.
This was when there was a distinct shift in gears as word began getting around. “People saw a spick-and-span place to pick up their vada pavs for Rs 5,” he says. The third store then followed in the more upmarket suburb of Andheri (West). Gupta realised that the ideal solution was to have stores on either side of Mumbai’s railway stations (the city’s lifeline) that would assure enough crowds to buy the vada pav and move on. He then took the decision to focus on marketing and product development while outsourcing the front-end and back-end (central kitchen) operations to franchisees.
“This way, everyone concerned would make profits and it became a win-win situation for all the stakeholders,” Gupta says. Today, Jumboking has 45 outlets and plans to increase this to 100 in the next 12 months. While Mumbai accounts for a lion’s share with 35, Bangalore, Aurangabad and select parts of Gujarat take up the balance. Jumboking now plans to extend its presence to 27 new cities over the next 12 months of which Mysore, Goa and Noida near Delhi are already finalised.
The idea is to average out the number of stores in each metro to at least 30 that would enhance the Jumboking presence closer to 1,000 stores in quick time. Even while the vada pav is standardised across the country, there have been some interesting lessons learnt along the way. The first foray into Gujarat four years ago was a bit of a disaster because customers wondered why the product was priced only at Rs 10. Jumboking had possibly thought that vada pav was eaten by those with little money. “Obviously, it was too late to remedy the mistake,” Gupta quips.
Likewise, there was an attempt to have an air-conditioned sit-in restaurant in Bangalore for 20 people which was all very nice except that the takeaways were doing twice as much business. It was crystal clear that the Jumboking concept was about saving time. Hence, the locations would have to be in those places where people were pressed for time. “When you are in a hurry, come to Jumboking is our credo,” Gupta says.
Gujarat experience
Gujarat spawned yet another important experience at a time when the company was still finding its way around in this new terrain. “We were wondering how vada pav cart sellers were having a field day while people were just not coming into our beautiful store. It is then I discovered that the trick was butter which had escaped our attention,” Gupta says. Jumboking wasted little time taking up the idea and sales doubled with the butter jumbo. It was clear that the people of Gujarat liked butter and the experiment was replicated in Mumbai. In two months, this variant accounted for 60 per cent of vada pav sales in the city.
However, when prices of potato and butter went up, the company had to hike prices from Rs 10 to Rs 12. Yet, it was all too aware that the Rs 10 price point was critical. “We then decided to grill the vada and two months later, 60 per cent of the sales shifted here while the butter pav reduced dramatically,” Gupta says.
Jumboking has different types of vada pavs, including salad, Schezwan, chole. All these are at price points ranging from Rs 15-40. The target users are those vada pav customers who are especially concerned about the quality of oil and masala. They make up for about a fifth of the 20 lakh vada pavs sold in Mumbai everyday.
“It is this number that I would like to attract to Jumboking and if we even get half of them to spend Rs 30 a day, it is a huge market for us,” Gupta says.
From his point of view, the best bet is to continue with the takeaway model since sit-ins and home deliveries affect profits and create manpower issues. “We will be the ATMs and not the full-service bank,” Gupta reiterates.
Over the next couple of years, he has targeted the top 65 cities of the country to house a Jumboking store. The products are standardised (frozen patty and sauce come out of one point) to control quality while the bread is bought locally. “The foundation is set and we need to control growth without going overboard. Gupta has set his eyes on a ten-fold increase in turnover to Rs 500 crore this decade.